Washington, D.C. Some of the nation’s largest banks will be scrambling to demonstrate that they can raise capital after results of government stress tests leaked out, showing many need more funds. The Treasury Department will officially release results today.
The tests were designed to gauge whether any of the nation’s 19 largest banks would need more capital to survive a deeper recession. It turns out many of the banks do: Wells Fargo & Co., Citigroup Inc. and Bank of America Corp. all need billions more, regulators have told them.
The tests put banks through two scenarios: one that reflected expectations about the current recession and another that envisioned a recession deeper than what analysts predict.